Administrators allege Highrise Telecoms' former director hindered wind-up

The administrators of now-shuttered telco reseller Highrise Telecoms have alleged that its former director interfered with company operations while it was under their management.

Administrators David Ian Mansfield and Neil Robert Cussen of Deloitte said former director Francesco Andreone moved a number of Highrise’s clients to a different wholesaler shortly after their appointment in October 2018.

Sydney-based Highrise was placed in administration last year by petitioning creditor and white label telco Buroserv, which claimed just over $428,000 in debts. According to ASIC’s records, Highrise’s creditors passed a resolution to have the company wound up.

Mansfield and Cussen alleged that Andreone moved clients from Buroserv to rival Telcoinabox (TIAB), causing clients to receive two bills from two separate suppliers for the same period.

Andreone, believed to be acting as a “shadow director”, allegedly issued falsified invoices, with bank account details not belonging to Highrise, the administrators, Buroserv or TIAB.

Customers were also allegedly receiving incorrect bills, some including charges that had already been paid.

“The administrators have had significant difficulty trading the company’s business, and have
expended a significant amount of time dealing with the above-mentioned issues as they have become known,” documents obtained from ASIC read.

Mansfield and Cussen continued to operate the company upon their appointment, in order to preserve the business's value in the event of a potential sale. The company was put up for sale on 1 February.

Mismanagement claims

Mansfield and Cussen alleged Highrise was unable to pay creditors due to poor strategic management and inadequate cash flow, as well as related parties withdrawing funds. They said Andreone did not provide them with a reason for the company's financial difficulties.

The administrators also alleged that just over $360,000 in company funds were transferred to a related entity owned by the current director and Andreone called “Andreone Family Trust”, as the transactions were labelled as “HRT to AFT”.

An additional $180,000 transferred to related parties is also being investigated, bringing the total amount of possible director-related uncommercial transactions to $540,000.

The company’s Xero management accounts also revealed more than $62,000 in “entertainment expenses” and $82,000 in “travel expenses” between the 2016 and 2019 financial years. The administrators said the expenses were personal in nature.

History of delinquency

Highrise became a Buroserv reseller in 2016, servicing strata companies’ and managing bodies corporate and strata plans. The company claimed its services could help customers reduce their telecoms and data costs while also managing their networks.

Buroserv cancelled the company's services in October 2017 due to overdue payments, with Highrise entering a debt repayment agreement. The administrators said this agreement was not honoured.

Buroserv eventually took control of Highrise's billing and collection process in May 2018, with both companies entering into a deed of forbearance. The deed was also not honoured, with Buroserv eventually appointing the administrators in October.

CRN has attempted to reach out to Andreone for comment.